Price increase in pan de sal, wheat products looms

MANILA, Philippines – The price of pan de sal would go up by 25 centavos a piece and a loaf of bread by P1.50 if the price of flour increases in the first week of August.

The price increase of pan de sal and other bread products would be implemented within a week or two, unless the government would be able to stop flour millers from jacking up their prices.

Officers of different bakers groups revealed this information yesterday during the Balitaan sa Tinapayan in Dapitan, Manila.

Among those who showed up during the weekly forum were Simplicio Umali, president of the Philippine Baking Industry Group Inc. (PhilBaking); Marcos Ong, president of the Filipino Chinese Bakery Association Inc., and Henry Ah, also of FCBAI.

“We were given advice by the flour millers that prices of flour would go up within the week from P920 or P930 per bag, up to P970 to P975 per bag of flour. This is the type of flour being used to make pan de sal and loaf bread. This is a 5.5 percent increase in prices,” Umali said.

There are flour millers in Metro Manila, Batangas, Mindanao and Cebu.

“We are questioning the increase of flour. Why is it that prices of flour in the country would increase if the price in the market is going down since April 2008 up to now? This is expected to go down by September up to December this year,” Umali said.

The global flour price is going down since April 2008 towards the same level as of the last quarter of 2007 before prices of flour went up in the Philippines. The future prices are expected to go down from August, harvest time in the US where most of the flour comes from, according to PhilBaking.

Umali said the supply of flour in the US would go up by 19 percent, about 67 million metric tons for this year, and that the global supply of wheat will go up by 9 percent starting from 642 million metric tons up to 665 million metric tons.

This is an increase of 23 million metric tons in the world.

He also said that Australia is projecting 23 million metric tons of the harvest due to the improvement of weather in their country.

Some suppliers of low priced wheat are in Russia and Ukraine, and they would increase their production by 17 percent, from 64 million metric tons, they would produce 75 million metric tons of wheat, said Umali.

“If there is also an increase in the supply of wheat, the tendency is lowering of prices of wheat. We are wondering why the local market prices are going up when the global prices are going down,” said Umali.

He said the baker’s associations have written a letter to the Department of Trade and Industry (DTI) asking them to restrain the flour millers from implementing the increase.

Umali claimed that the notice of price increase ranges from P45 to P50.

However, in an interview with The STAR, Ric Pinca, executive director of the Philippine Association of Flour Millers, said that they would increase their prices of flour per bag by only P13, from P957 to P970.

He said this is due to the higher cost of wheat inventory.

Pinca confirmed the prices of flour would start going up by today, and would be implemented by some millers only.

He added that the other millers might also increase their prices during a different date.

Umali, on the other hand, said that if the DTI would be able to restrain this, prices of bread do not have to go up.

“The DTI should also investigate local flour millers, and ask them to lower their prices, based on prices of wheat in the world market. Freight charges also went down by 20 percent,” he said.